APA Group (ASX:APA) announced it has reached a landmark agreement with Incitec Pivot Limited (ASX: IPL). The contract, which will start on the commencement of commercial operations on the Northern Gas Pipeline, will deliver gas from the Mereenie field in southern Northern Territory, to IPL’s fertiliser plant at Gibson Island, Queensland, through some 3,300km of gas pipelines, the majority of which is APA’s East Coast Grid.
Managing Director Mick McCormack said, “IPL is a foundation customer of APA and it is very pleasing to help an industrial customer, particularly one with an almost 100 year history of manufacturing in Australia.
“APA have been able to help make this deal happen, not only through our investment in developing the East Coast Grid over many years, but also because we have worked very closely with IPL to understand and then meet their needs by providing services in a market which is currently in tight supply.”
This unique and innovative solution for IPL will help see the Gibson Island plant continue to operate and contribute to the Australian economy, importantly maintaining jobs for Australians. “I am extremely pleased to say that APA has yet again been able to provide a cost effective and flexible service to one of its key customers. We are always looking to add value for our customers to assist them in optimising their energy requirements,” said Mr McCormack.
The transportation agreement is for an initial term that concludes 1 January 2020, with an extension option. Gas will be received on APA’s Amadeus Gas Pipeline at Mereenie, then transported via the Northern Gas Pipeline, to enter APA’s East Coast Grid at Mount Isa. From there, it will travel via the Carpentaria Gas Pipeline, the South West Queensland Pipeline and the Roma Brisbane Pipeline to finally reach IPL’s plant near Brisbane, Queensland.
Mr McCormack said, “By helping our customers with smart and flexible solutions that assist them to meet the requirements of their own customers and energy portfolios, we continue to support our significant investment in bringing together the East Coast Grid. We’re a growth business and we grow as our customers businesses grow. Currently, APA is in the midst of around $1.3 billion plus of further committed growth capital projects, the vast majority of which are for existing customers wanting new energy solutions.”
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